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Christine Lagarde has welcomed the huge monetary stimulus plan unveiled by Japan and says it will help to boost global growth at a time when the outlook is already starting to improve.

The Bank of Japan last week announced it aimed to double its monetary base over two years through the aggressive purchase of long-term bonds, in a dramatic shift from previous policy.

Ms Lagarde, the International Monetary Fund's managing director, said loose monetary policies and "unconventional measures" had helped boost global growth and "the reforms just announced by the BoJ are another welcome step in this direction". She was speaking at the Bo'ao business forum in southern China on Sunday.

In contrast, some Chinese economists and business leaders have criticised the move by the BoJ, saying it will hurt export competitiveness in other countries and could trigger large capital inflows to China and push up inflation.

"A substantial portion of the global economy looks better now than it did a year ago," Ms Lagarde said. "In particular, we are beginning to see momentum pick up in the US."

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During her spell as managing director of the IMF, Ms Lagarde has often spoken warmly of Japan and its record in bolstering the IMF's resources.

In November 2008, in the wake of the Lehman collapse, then prime minister Taro Aso -- now finance minister and deputy to prime minister Shinzo Abe -- offered the IMF up to $100bn in temporary funds, while calling on other member countries to inject additional permanent capital.

And when the IMF asked member states for more capital last year to boost its firepower, Japan was first to commit. Its $60bn pledge was also the largest from any country, helping to lift the total loans available to the IMF above $1tn.

Japan's actions, she said, had helped "stave off an even more dire global economic collapse".

But serious risks remain for the global rebound, particularly worries about continued low growth in Europe and "fiscal risks in some major developed economies that are weighing on recovery," Ms Lagarde told the Bo'ao forum.

She said European banking union was a key first step to putting Europe on the path to sustainable recovery.

Ms Lagarde also said that central banks in Asia should begin to think about the timing and scale of reductions in monetary support for their economies and about returning fiscal balances to pre-2008 levels.

Ms Lagarde said the IMF was pleased to see China taking steps to quantify and reduce local government borrowing that funded a huge infrastructure boom in recent years and helped the country pull itself out of a downturn in the wake of the financial crisis.

"Efforts by the Chinese authorities to co-ordinate, control and limit local government indebtedness is a good thing in our view," she said.

Local governments in China had run up debts of more than Rmb20tn ($3.2tn), or nearly double previous estimates released by the government, a former Chinese finance minister said at Bo'ao.

Xiang Huaicheng told reporters that earlier government reports of around Rmb11tn in local government debt had seriously underestimated the total but that overall debt levels in China were manageable.

He did not elaborate but his mention of the Rmb11tn figure appeared to refer to an estimate published by China's National Audit Office in 2011.

Mr Xiang said the central government had debts of between Rmb7tn and Rmb8tn and the overall government debt-to-gross domestic product ratio was about 40 per cent at the end of last year, roughly unchanged from a year earlier.